Domestic Equity ETFs See 500% Surge In Inflows In March 2025 Amid Market Volatility

New Delhi, Apr 29 (KNN) Domestic equity-oriented ETFs witnessed a dramatic 500 per cent month-on-month increase in net inflows during March 2025, according to ICRA Analytics.

Domestic Equity ETFs focus specifically on stocks (equities) within the country's market. For Indian investors, these ETFs invest exclusively in shares of India-based companies.

This substantial growth indicates investors are increasingly gravitating toward passive investment vehicles during a period of market uncertainty.

Data released by the Association of Mutual Funds in India (AMFI) revealed that inflows into domestic equity ETFs jumped from Rs 1,943.80 crore in February to Rs 11,808.08 crore in March 2025.

Simultaneously, thematic funds experienced a significant decline, with inflows plummeting to Rs 170 crore from Rs 5,712 crore in the previous month.

Despite global market turbulence caused by reciprocal tariffs implemented by the US President, domestic mutual fund investors maintained their position as net buyers in equity funds.

Equity mutual fund inflows totalled Rs 25,082.01 crore in March 2025, marking the 49th consecutive month of positive equity inflows since March 2021, though this figure represents an 11-month low.

On a comparative basis, equity fund inflows decreased by 14 per cent month-on-month but increased approximately 11 per cent year-on-year.

ICRA Analytics highlighted that investors demonstrated resilience and maturity by maintaining disciplined investment approaches throughout market volatility.

The mutual fund industry's overall assets under management (AUM) grew by 23.11 per cent year-on-year as of March 2025, according to AMFI data. Equity-oriented schemes led this growth at 25.39 per cent, followed by other schemes including index funds and ETFs at 22.72 per cent.

Within equity funds, Sectoral/Thematic Funds recorded the highest AUM growth at 53.04 per cent year-on-year, with Multi Cap Funds following at over 40 per cent.

In the alternative schemes category, Gold ETFs exhibited the strongest AUM growth at 88.60 per cent, while Index Funds grew by more than 30 per cent.

The debt category saw Long Duration Funds, Gilt Funds, and Money Market Funds all reporting AUM growth exceeding 50 per cent over the year.

Mutual fund folio count increased by 31.85 per cent year-on-year by March 2025, with other schemes leading at 48.31 per cent growth, followed by equity schemes at 33.38 per cent. Conversely, debt-oriented schemes experienced a 3 per cent decline in folio count.

Systematic Investment Plans (SIPs) continued their expansion trajectory, with outstanding SIP accounts increasing by 20 per cent year-on-year to 1005.39 lakh in March 2025.

Contributing SIP accounts grew by 27 per cent over the same period. SIP contributions rose by 35 per cent year-on-year to Rs 25,926 crore, despite a marginal monthly decline of 0.28 per cent.

SIP AUM increased by 25 per cent annually and represented 20.31 per cent of the overall AUM in March 2025, up from 20.07 per cent in the previous year, underscoring the growing popularity of systematic investment approaches among Indian investors.

(KNN Bureau)